Business

Zimplats given two weeks to hand over 29.5% stake

Impala Platinum's Zimbabwe unit has been ordered to transfer 29.5% of its shares to a state-run fund in order to comply with local empowerment laws.

Impala Platinum’s Zimbabwe unit, Zimplats, has been ordered to transfer 29.5% of its shares to a state-run fund in order to comply with local empowerment laws, according to a letter written by a government minister.

Zimplats, 87% owned by Implats, had failed to comply fully with the law, which seeks to localise at least 51% of shares in all foreign-owned firms, empowerment minister Saviour Kasukuwere wrote in a letter seen by Reuters on Sunday.

Failure to present the government with a plan to transfer the holding within two weeks would result in unspecified “enforcement mechanisms”, the letter added.

Kasukuwere has in the past threatened to cancel the mining licences of firms that do not comply.

On Friday, Implats said Zimbabwe had rejected part of its empowerment plan, along with that of Mimosa, its 50-50 joint venture platinum mine with Aquarius Platinum.

Both mines have recently launched community share ownership trusts, to which they each gave 10% shareholdings each.

Zimbabwe’s empowerment laws, being championed by President Robert Mugabe, have been criticised by Prime Minister Morgan Tsvangirai, his partner in a shaky coalition government formed three years ago after violent and disputed elections in 2008.

Analysts say the law is holding back the impoverished southern African country’s economic recovery from a decade of turbulence and contraction.

Critics link the empowerment push to Mugabe’s plans to hold elections this year.—Reuters